Saturday, August 25, 2012

Resort Towns Face a Last Picture Show

The Strand 5 on the Ocean City, N.J., boardwalk has been operating since 1938. But its future is in doubt over the need to upgrade to digital projectors.

By
ERIC HYNES

OCEAN CITY, N.J. — There are nicer and newer movie theaters than the Strand 5 on the boardwalk here on the Jersey Shore. The sound is uneven, and the auditoriums haven’t been renovated in decades.

But the Strand does have history. It opened as a one-screen movie house in August 1938, and nearly 75 years later the cinema, now a five-screen multiplex, is still serving exiled beachgoers. But for how long?

As a woman in a black bikini and white cover-up flip-flopped into “The Dark Knight Rises” one afternoon this month, the ticket taker, Shelby Fogarty, struck a mournful tone, mindful that the Strand has been for sale for several years, and that management — the family-owned Frank theater chain — won’t say if the theater and its boardwalk neighbor, the Moorlyn Stadium 4, will reopen next season.

If they don’t, Ms. Fogarty, 20, whose family has been summering here since she was a baby, said the loss wouldn’t just be personal: “Time and again I’ve had people come up to me and say, ‘I remember coming here when I was little, and it was only 15 cents to see a movie.’ ”

All along the Jersey Shore, as well as from Montauk to Martha’s Vineyard — indeed in just about any area in the country where mom-and-pop theaters still survive — old movie houses like the Strand are faced with a live-or-die proposition this Labor Day. In an already unsparing economy, and with entertainment rivals multiplying with every new tablet and flat screen, movie theaters are being asked to invest in costly digital projectors just to stay open.

According to recent industry statements, the major Hollywood studios are planning to complete the switch to digital by ceasing to release 35-millimeter film altogether; 20th Century Fox promises to phase out film by the end of next year, and the others are expected to follow. Which means that the analog projectors that have whirred along for decades will be suddenly rendered incapable of playing modern movies. For many seasonal theaters, the dog days of this summer may be the only days they have left.

Though his theater will probably adjust, John Esposito, the owner of the Beach Cinema in Bradley Beach, N.J., warned, “America’s going to lose a lot of its past because of this.”

Digital projectors are compatible with hard drives and files called Digital Cinema Packages, which are cheaper to produce and easier to disseminate than film. John Fithian, president of the National Association of Theater Owners, says 30,000 screens have already been converted, leaving nearly 10,000 in some stage of transition. As he told exhibitors at CinemaCon in 2011, “If you don’t make the decision to get on the digital train soon, you will be making the decision to get out of the business.”

But for many small cinemas, especially the seasonal, for which a single $75,000 digital projector and attendant costs can exceed an entire year’s profits, the decision to get on the digital train comes with considerable risk. Thanks to pooled resources and capital, multiplex chains like Regal and Cinemark can more easily absorb such expenditures, but for small theaters it’s especially tough to justify that kind of investment — or to persuade banks to give them loans.

“Even if the finance company is willing to hold the equipment as collateral,” said Judith Deleonardis, an owner of the Delsea Drive-In in Vineland, N.J., “they’re going to look at your debt to income and say, ‘You’re maxed, and therefore we can’t do this.’ ”

And while exhibitors are accustomed to spending money to improve their businesses, digital conversion isn’t an outlay that can be used to attract audiences: the digital image has its partisans, but it’s still replacing something that was already there.

“It’s not like you’re taking on that debt load to add another auditorium that brings in more income,” said Bob Card, owner of another Strand Theater, the classic marquee-on-the-town-square movie house in the lakeside Adirondacks town of Old Forge, N.Y. (Strand is an especially popular name for waterside theaters.)

He said that he was committed to keeping the Strand running but that he was undecided about how to finance a conversion that could cost hundreds of thousands of dollars for his theater’s four screens. Since the Strand is a for-profit theater, he’s reluctant to ask patrons for donations (though that hasn’t stopped theaters like the Onarga and the Harvest Moon Twin Drive-In, both in Illinois, from doing so). Instead he’s waiting to hear about several state grants and weighing, as many other independent exhibitors are, whether to sign a joint financing agreement.

Devised through negotiations between the national theater owners group and the major studios, these Virtual Print Fee agreements entail per-movie payments from distributors for running their movies. For distributors, these givebacks are more affordable than striking film prints, and for theaters that qualify (because of limited grosses, many seasonal ones don’t), these payments can help pay off bank loans or leases.

But those agreements, many of which must be entered into by Sept. 30, come with strings attached that can dictate what and how often films are shown, and even deter independent distributors that can’t afford to pay the fee. “It puts some rough constraints on what you do with your business,” Mr. Card said.

Which is why indie-minded nonprofits like the Ambler and County Theaters outside Philadelphia not only raised funds from members and patrons, but also bought equipment that could be upgraded as the industry pursues further technical advancements.

“The scary part of switching to digital cinema is that because it’s computer-based, it’s all going to happen again very soon,” said John Toner, the executive director of both theaters.

Some seasonal exhibitors can’t afford that gamble. The knotty-pine Tamarack Cafe and Movie House in Inlet, N.Y., is closing after having served that lakeside community, not far from Old Forge, since 1946.

“There’s no one in the world that would consider it a wise choice to continue,” said the owner, Brandon DiMartino, citing the drop-off in attendance since a multiplex opened nearby, as well as the digital expenses for an especially short earning season. (The Tamarack is open only in July and August.) “Honestly, the digital thing came at a good time. We’ve reached a crossroads.”

Deborah Frank, executive vice president of Frank Theaters, understands the predicament. “It’s a tough job to run a seasonal business, whatever kind,” she said. “You don’t have those 12 months to spread things out.”

While still mulling the fate of the Ocean City cinemas, Frank has decided to close the Beach Stadium 5 on Long Beach Island, N.J., at season’s end, yielding the space to an expanding Acme Supermarket. Ms. Frank said keeping the theater going in this strictly seasonal town made little economic sense, especially with the digital outlay looming.

Farther down the Jersey Shore, yet another Strand Theater, this one on the Wildwood boardwalk, didn’t even open this summer, leaving this vacation town — once so movie-mad that there were as many as seven theaters — without a single operating cinema.

Mr. Esposito’s single-screen Beach Cinema in Bradley Beach is still hanging around as a charming, second-run retro house. With musty old felt seats and majestic shoulder-height urinals in the men’s room, the theater seems untouched since Jack Nicholson, who grew up nearby, would go there in the early 1950s. Mr. Esposito, who began running the Beach after saving it from disrepute as a pornography house in 1977, is considering digital options but begrudges having to do so.

“I really would like to see film stay film,” he said. “Why does it have to disappear 100 percent?”

Back down the Garden State Parkway, the venerable Harbor 5 in Stone Harbor will be outfitted for digital, thanks to the presence of more year-round residents and a slightly longer season, Ms. Frank said. But the Kriss Kringle-bearded projectionist, Joe Griesbach, lamented that his profession would become redundant.

“With digital you pretty much don’t need anyone in the booth at all,” he said. “Only to download the movies into the server. You can do it all from the manager’s office.”

But when he waxed romantic about mechanical projectors, the manager, Tom Fink, reminded him of how much maintenance the old dogs required. “Christ showed a movie at the Last Supper with some of these machines,” Mr. Fink said.

At the two-screen Delsea Drive-In analog projectors still beam images from little white buildings nestled in a field of cars and minivans. But that should change by next year, since the Delsea is adding a floor above the snack bar for the digital equipment. That’s where the owners, Judith and John Deleonardis, were talking shop recently as “Total Recall” and “Ice Age: Continental Drift” flickered beneath stormy skies.

The Deleonardises reopened the dormant theater in 2004 and are pressing on, even though digital-conversion loans are proving hard to secure, and even though their triplets have reached college age.

“When I think of what we had to do to take it this far, we probably shouldn’t have done it,” Mrs. Deleonardis said.

“C’mon,” her husband asked, “what would you be doing?”

“I would have had equity in my home,” she said, “which I could have used for my children’s college.”

He shrugged. “Overrated.”

Later he stood under the snack shop awning while rain fell hard — blessedly briefly — and the “Ice Age” credits rolled. Some cars drove off; others arrived for the second feature. A young man approached and sheepishly asked if someone could jump-start his car. After a brief intermission, the show went on.

A version of this article appeared in print on August 25, 2012, on page C1 of the New York edition with the headline: Resort Towns Face A Last Picture Show.